Many investors are not interested in becoming a landlord; unfortunately, unless they have another stream of income, investing in real estate requires financial support from somewhere. Investors that are not open to becoming a landlord may be losing money.
There are some basic guidelines to be an effective and profitable landlord. You have to have the right tenant, collect and maintain deposits, inspect the property, collect rents, and possibly evict tenants. We will cover some of the basics you need in order to be an effective landlord.
Choosing tenants is probably the single most important thing that you can do to save yourself both time and money. Your single most responsibility is your property use and the maintenance. While it is illegal to discriminate against any applicant, this is still your property and you have the right to pick who you want to live there. Renting to the first applicant through the door may not be the best idea; prospective tenants look will hunt for the right property and you should for the right tenant.
You need to have a completely filled out "Applications for Rental", you can get these at your local office supply store or you can have your attorney draft one for you. At a minimum, make sure that an attorney reviews the paperwork to be sure your property and you personally are protected.
Perform a background check on all potential applicants. Call their employer, contact previous landlord; this may be the most important step. Verify credit references, if necessary, you can even do a full background check on someone using a number of different websites available today. Remember, do not cut corners here, this could cost you a great deal of money and time.
Posting a "For Rent" sign and running ads in the newspaper are not a very good way to attract trustworthy tenants. If this is what you use to find tenants then make sure that, you properly screen them. Finding a family friend or acquaintance is usually the best avenue to finding the "perfect tenant"; offer them an incentive to find you a good, solid tenant.
To avoid a lot of "tire kickers" when posting ads in the newspaper, be sure to include accurate descriptions, rent amount, any deposit requirements, and restrictions you maintain, such as kids, pets, total occupants allowed. Without this information, you are opening your phone to a long list of people that are "just looking".
Assure all applicants that full consideration will be given to them, however do not be too eager to get a tenant in the property. Finding the tenant, one that meets your requirements is the best approach to being an effective landlord.
Start with the right tenants to effectively mange your properties. You need to make sure that the tenant that you have chosen is a good fit; you can save yourself from a great deal of expense and ultimately have the perfect situation if you are a real estate investor.
